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Clearstream, the Luxembourg-based clearing house, has launched a service to help fund managers monitor collateral levels under the European Union's incoming Alternative Investment Fund Managers Directive.

The new EU directive is forcing alternative fund managers to use depositaries

The new Clearstream service will provide fund managers with a report to show they are complying with the directive's requirements, which come into force from July 22.

The AIFMD requires non-Ucits investors, such as private equity and hedge funds, to use depositories in order to safeguard investors’ interests.

The responsibilities of a depository are to monitor cash, safeguard assets and to have oversight of investment compliance procedures.

The Clearstream service will include data on assets from the clearing house's network of custodians, sub-custodians and its central securities depositories to show that the collateral levels are in line with the directive's requirements.

Berthold Kracke, executive board of Clearstream and head of business management, said: "As a highly secure market infrastructure and securities settlement system, we are a natural partner for customers seeking to take on their responsibilities and manage their risk profile for the safekeeping of assets under AIFMD."